Over the last three decades, the prevailing view of information technology strategy has been that it is a functional-level strategy that must be aligned with the firm's chosen business strategy. Even ...within this socalled alignment view, business strategy directed IT strategy. During the last decade, the business infrastructure has become digital with increased interconnections among products, processes, and services. Across many firms spanning different industries and sectors, digital technologies (viewed as combinations of information, computing, communication, and connectivity technologies) are fundamentally transforming business strategies, business processes, firm capabilities, products and services, and key interfirm relationships in extended business networks. Accordingly, we argue that the time is right to rethink the role of IT strategy, from that of a functional-level strategy—aligned but essentially always subordinate to business strategy—to one that reflects a fusion between IT strategy and business strategy. This fusion is herein termed digital business strategy. We identify four key themes to guide our thinking on digital business strategy and help provide a framework to define the next generation of insights. The four themes are (1) the scope of digital business strategy, (2) the scale of digital business strategy, (3) the speed of digital business strategy, and (4) the sources of business value creation and capture in digital business strategy. After elaborating on each of these four themes, we discuss the success metrics and potential performance implications from pursuing a digital business strategy. We also show how the papers in the special issue shed light on digital strategies and offer directions to advance insights and shape future research.
Digital transformation and resultant business model innovation have fundamentally altered consumers’ expectations and behaviors, putting immense pressure on traditional firms, and disrupting numerous ...markets. Drawing on extant literature, we identify three stages of digital transformation: digitization, digitalization, and digital transformation. We identify and delineate growth strategies for digital firms as well as the assets and capabilities required in order to successfully transform digitally. We posit that digital transformation requires specific organizational structures and bears consequences for the metrics used to calibrate performance. Finally, we provide a research agenda to stimulate and guide future research on digital transformation.
Leveraging the recent research interest in emerging economies, this Perspective paper argues that an institution-based view of international business (IB) strategy has emerged. It is positioned as ...one leg that helps sustain the "strategy tripod" (the other two legs consisting of the industry- and resource-based views). We then review four diverse areas of substantive research: (1) antidumping as entry barriers; (2) competing in and out of India; (3) growing the firm in China; and (4) governing the corporation in emerging economies. Overall, we argue that an institution-based view of IB strategy, in combination with industry- and resource-based views, will not only help sustain a strategy tripod, but also shed significant light on the most fundamental questions confronting IB, such as "What drives firm strategy and performance in IB?"
Digital transformation (DT) is essential for all companies and industries, depending crucially on systems, IT, strategy, and people. In this research, we analyse how firms’ characteristics, ...associated with management characteristics, promote DT in Portuguese companies. The model considers the relationship between digital strategy and corporate and business strategy, according to firm and management characteristics. We use a multilevel analysis, applying fsQCA to data obtained from 47 Portuguese firms. The results represent an important step forward in the knowledge of the conditions to promote higher stages of DT, especially regarding leadership and management associated with certain firms’ characteristics. The conclusions support the crucial role of leadership and especially the importance of managers’ coherence towards companies’ mission to promote more advanced stages of DT. At the same time, it contributes to develop knowledge about the best possible combination of firms’ and management characteristics to promote DT.
The content industry has been undergoing a tremendous transformation in the last two decades. We focus in this paper on recent changes in the form of social computing. Although the content industry ...has implemented social computing to a large extent, it has done so from a techno-centric approach in which social features are viewed as complementary rather than integral to content. This approach does not capitalize on users' social behavior in the website and does not answer the content industry's need to elicit payment from consumers. We suggest that both of these objectives can be achieved by acknowledging the fusion between content and community, making the social experience central to the content website's digital business strategy. We use data from Last.fm, a site offering both music consumption and online community features. The basic use of Last. fin is free, and premium services are provided for a fixed monthly subscription fee. Although the premium services on Last. fin are aimed primarily at improving the content consumption experience, we find that willingness to pay for premium services is strongly associated with the level of community participation of the user. Drawing from the literature on levels of participation in online communities, we show that consumers' willingness to pay increases as they climb the so-called "ladder of participation" on the website. Moreover, we find that willingness to pay is more strongly linked to community participation than to the volume of content consumption. We control for self-selection bias by using propensity score matching. We extend our results by estimating a hazard model to study the effect of community activity on the time between joining the website and the subscription decision. Our results suggest that firms whose digital business models remain viable in a world of "freemium" will be those that take a strategic rather than techno-centric view of social media, that integrate social media into the consumption and purchase experience rather than use it merely as a substitute for offline soft marketing. We provide new evidence of the importance of fusing social computing with content delivery and, in the process, lay a foundation for a broader strategic path for the digital content industry in an age of growing user participation.
•We define fundamental concepts related to Artificial Intelligence and about the Information Technology alignment with Business Strategy.•We provide a critical literature review related to the ...integration of AI to Business Strategy.•We propose a framework with the identification of knowledge gaps and the propositions for future researches.
Artificial Intelligence tools have attracted attention from the literature and business organizations in the last decade, especially by the advances in machine learning techniques. However, despite the great potential of AI technologies for solving problems, there are still issues involved in practical use and lack of knowledge as regards using AI in a strategic way, in order to create business value. In this context, the present study aims to fill this gap by: providing a critical literature review related to the integration of AI to organizational strategy; synthetizing the existing approaches and frameworks, highlighting the potential benefits, challenges and opportunities; presenting a discussion about future research directions. Through a systematic literature review, research articles were analyzed. Besides gaps for future studies, a conceptual framework is presented, discussed according to four sources of value creation: (i) decision support; (ii) customer and employee engagement; (iii) automation; and (iv) new products and services. These findings contribute to both theoretical and managerial perspectives, with extensive opportunities for generating novel theory and new forms of management practices.
In this paper, we examine how the competitive industry environment shapes the way that digital strategic posture (defined as a focal firm's degree of engagement in a particular class of digital ...business practices relative to the industry norm) influences firms' realized digital business strategy. We focus on two forms of digital strategy: general IT investment and IT outsourcing investment. Drawing from prior literature on determinants of IT activity and competitive dynamics, we argue that three elements of the industry environment determine whether digital strategic posture has an increasingly convergent or divergent influence on digital business strategy. By divergent influence, we mean an influence that leads to spending substantially more or less on a particular strategic activity than industry norms. We predict that a digital strategic posture (difference from the industry mean) has an increasingly divergent effect on digital business strategy under higher industry turbulence, while having an increasingly convergent effect on digital business strategy under higher industry concentration and higher industry growth. The study uses archival data for 400 U.S.-based firms from 1999 to 2006. Our findings imply that digital business strategy is not solely a matter of optimizing firm operations internally or of responding to one or two focal competitors, but also arises strikingly from awareness and responsiveness to the digital business competitive environment. Collectively, the findings provide insights on how strategic posture and industry environment influence firms' digital business strategy.
Business strategies often only skim the surface of the matter at hand, presenting general and vague descriptions of the direction of development without providing specifics or hinting at their ...essence. Strategies must be operationalized to effectively drive concrete actions and results, i.e., presented with a higher degree of specificity. Avoiding streamlined formulations and providing clear and objective language can aid in creating an engaging and mobilizing strategy. Questioning techniques can be employed as an initial phase in operationalizing business strategy. The inquiries used to construct the business strategy are founded on the fundamental questions applicable to any economy – “For whom?”, “What?”, and “How?”. These questions point to the market-product-technology trinity, which constitutes the essential components of any business and, consequently, any business strategy. In addition,, it is important to ask further questions that clarify the relationships between different elements of the business to formulate a strong business strategy. A fair assessment of the developed strategy’s efficacy can be made by providing specific answers to these questions.
PDF
